IFRS and US GAAP authorised CMUCPP maintains the constant purchasing power of constant real value non-monetary items (e.g. capital, all items in shareholders´ equity, provisions, salaries, wages, pensions, taxes, trade debtors/creditors, etc) in terms of a Daily CPI in entities that at least break even in real value during low and high inflation, hyperinflation and deflation - ceteris paribus. European Accounting Assoc: "Capital maintenance is a competing objective of financial reporting."
Inflation only affects monetary items in financial statements
Inflation only affects monetary items in
statement The effects of inflation in financial
statements is a very common statement in accounting literature, international
accounting standard setting, central banking research and in accounting in
only affects the real value on monetary items and nothing else. Inflation has
no effect on the real value of non-monetary items. The stable measuring unit
assumption affects the real value of non-monetary items.
intended with the statement The effects
of inflation in financial statements is to state: The effects of (1) inflation
on monetary items and (2) the stable measuring unit assumption on non-monetary
items in financial statements.
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